You might have heard the term “side-hustle tax” a lot lately, but what does it really mean?

Basically, the little side hustle you have for some extra weekend cash could end up costing you in the long run. Whether you’re selling pre-loved clothes on Vinted or Depop, sharing your arts and crafts on eBay and Etsy, or renting out your place to holiday goers on Airbnb, you might be subject to the side-hustle tax.

If you are UK resident and relate to any of the above please continue reading to find out more information about how the changes may affect you.

The main change is that the sites themselves HAVE to share the amount of income generated by an individual each year and this began on 1st January 2024 running to the 31st December 2024 for the 2025 tax year and then will continue every year after this year.

As well as the earnings you’ve generated from their site, they will share your name, address, date of birth, NI Number, and any fees which you have paid on their site.

But how will that affect you I hear you ask- in short, not much does change IF you only sell a small number of items, more specifically, less than 30 items a year OR earn under £1,700. However, if you do earn over £1000 from your side hustle you are still be required to declare and file your self-assessment to HMRC.

HMRC can take enforcement action against you if you haven’t arranged to pay. It’s extremely rare to be prosecuted or sent to prison BUT they do have the authority to take your possessions to sell at auction.

If you don’t file correctly & HMRC find you owe them money, you will most likely receive a letter asking for payment. We advise you to call 0300 20 3300 or the number shown on the letter and pay/arrange to make payment then ask for the debt to be cancelled.

ALSO, sometimes HMRC may make mistakes, could be too low or too high- either way it is YOUR responsibility to double check. HMRC may issue a penalty but can be revoked if you can prove that it was their mistake.

It’s a good idea to keep detailed and up-to-date records of all your sales and expenses. An online bookkeeping service can help keep everything in one place, making it easy and stress-free to file your tax return for your side hustle.